UPS Expects 14% Rise in Holiday Shipments
UPS Inc. announced that it is preparing to deliver a record 700 million packages over the holidays, up 14% from last year as consumers continue to shift toward online shopping.
The Atlanta-based company normally delivers about 18 million packages a day, but expects to deliver more than 30 million packages a day during 13 of the 21 days before Christmas. UPS is also hiring 95,000 seasonal workers for the holiday season.
The busiest day is expected to be Monday, Dec. 19. Retailers are “teaching consumers to order sooner,” UPS chief financial officer Richard Peretz said. But UPS also expects high volumes the entire week leading into Christmas.
UPS ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
Online shopping boosts volume for UPS and other shippers but also brings complications from dealing with holiday surges and less-dense delivery patterns that can boost costs.
UPS also announced Oct. 27 that it is ordering 14 new Boeing 747-8 jumbo cargo jets, the first new planes to join its fleet since 2013.
The company, whose air hub is in Louisville, Ky., said volume growth is driving the decision to buy more large planes. It expects to get the planes between 2017 and 2020 and has options for another 14 in the future.
Adding the jumbo jets will allow UPS to move other planes in its fleet, including the slightly smaller Boeing 747-400, to more efficient routes.
UPS has more than 500 aircraft. The new 747-8 freighters can carry 34 shipping containers on the main deck and 14 in lower compartments, with capacity to hold about 30,000 packages.
The company made the announcements during a conference call on third-quarter financial results.
Lower fuel surcharges and changes in currency exchange rates hurt revenue growth, as UPS reported a 1% increase in profit to nearly $1.3 billion.
Revenue rose 4.9% to $14.9 billion. But operating expenses grew by 5.2% to $12.9 billion. Domestic operating profit fell by half a percent, in part because the quarter had one less operating day than the year-ago period, according to the company. The company said international operating profit had a record increase of nearly 14%, driven by increased rates, volume and efficiency.
Supply chain and freight operating profit fell by 5.9%.